That is a great observation on how it takes the money out of the street level sellers, very well put.

Sadly, when it is illegal, the poor folks who sell it essentially become fuel for the prison industrial complex. In a true free market, in which the state couldn't control the sale of arbitrary substances, these poor people could thrive as they wouldn't have to pay these steep barriers to entry from the state in the form of permits and fees. If they had a better product, they would beat out their rich competition with a substandard one.

I frequently buy produce from a local farmer because his product is far better than the store. Unfortunately, he makes far less than grocers because they can afford all the fees and permits to mass market substandard products.